What is Accounts Payable (AP)?
Accounts payable are the bills and debts that the business owes for goods or services that have been received, and it is the company's obligation to pay off the debt to its creditors or suppliers. In short, Accounts payable are a company's short-term liabilities. It is usual for small businesses to have liabilities as this helps manage the operation and cash flow. No matter how big your business is, accounts payable management is one of the most crucial tasks for a business owner.
Every payment a business make except for payroll falls under the accounts payable category, and ignorance or lack of knowledge about the accounts payable processes can negatively impact business operations. Poor accounts payable processes can damage reputations with vendors, lead to errors, penalties, time wastage, and even be susceptible to fraud. As your business grows, it is essential to take the proper steps to tackle the poor account payable processes. If these issues sound familiar, you should consider taking advantage of online platforms like Online Check Writer.
Accounts payable trends for 2022
1. Cloud Technology
The evolution of cloud technology and growth in the popularity of cloud-based platforms are among the most significant developments of the last decade. According to the growth report of Online Check Writer, the company saw an increase in over 270,000 new customer registrations since February 2020. Through the power of the cloud, now employees can access, edit and share accounts payable data from anywhere and anytime, making the process much more convenient and efficient. Instead of manually entering your financial data, the right accounting software does the heavy lifting for you and lets you stay on top of your accounts payable reporting.
Handling accounts payable can be pretty tiring. But recent shifts towards digital technology have created a need for cloud-based services and apps that allow accounting staff to manage bookkeeping processes, accounts payable, accounts receivable, cash flow, and other finance activities on remote setups. As the pandemic forced small businesses to adapt to modern ways, companies noticed the power and control cloud-based technology provides their finance departments.
2. Artificial Intelligence
With digitalization, machine learning utilization and the growth of artificial intelligence are increasing rapidly. This allows innovators to build AI-driven accounts payable solutions that lessen the need for human interference. Bots and digital systems will take care of all the repetitive and time-consuming tasks and allow for structured workflows, billing systems, and other applications that automate accounts payable. Integrating AI into accounting will facilitate, automated invoicing, routing, data capture, payment validation, general ledger coding, and many others. As AI applications improve, so will the businesses that use automated accounts payable management.
When you do accounts payable manually, errors and omissions are inevitable. These errors have the potential to break or damage your brand. However, with automation and AI-driven tools, mistakes can be significantly minimized, and accuracy in decision-making processes can be elevated.
3. Data Science
The future of accounts payable relies on how tech companies integrate data science into the accounting process. The truth is that a good number of accounts payable solutions depend on data science and finance analytics. It not only helps you to make payments easier but encompasses budgeting, influences vendor relationships, cash flow management, and helps businesses to establish relevant business policies.
Big data trends are still in their early stages as companies have only started to figure out their impact on their business growth. Fintech helps businesses improve their financial system by introducing online solutions like Online Check Writer and accounting software like QuickBooks. As innovations and their applications improve, finance departments can better analyze accounts payable trends and take better action regarding payment follow-up, cash flow management, expense projections, and working capital. Hence, an ideal accounts payable system needs to provide its users with analytical tools and valuable business insight to build their business for the future. And as the technology advances, we'll find more companies opening up to the idea of data science and AP analytics in 2022.
Benefits of Outsourcing Accounts Payable
1. Better Vendor Relationships
Using software designed to handle the accounts payable process can save vendors time, make payment transactions faster, reduce the debt burden, and remove the risk of fraud. In other words, accounts payable software can save time, eliminate paper usage, and cost-effectively produce higher-quality financial records. Platforms like Online Check Writer enable prompt action and help you maintain good communication with vendors, thereby improving the long-term relationships essential for business growth.
2. Increased Efficiency
Another advantage of outsourcing accounts payable to a third-party platform is the efficiency of financial records. Most business owners experience a lower number of human errors when outsourcing AP. An automated accounts payable with high-quality invoice data ensures accuracy, efficiency and can help businesses avoid mistakes, delays, and unnecessary costs.
3. Reduce the Risk of Fraud
The digital shift from paper to the cloud removes the need for pre-printed checks, thereby drastically reducing the risk of check theft or fraud. Moreover, sending payments digitally through software like Online Check Writer keeps your sensitive information private. This way, small businesses can centralize their payment system and easily keep track of their money management. In addition, a centralized payment system reduces confusion and miscommunication and creates a clear audit trail for both internal and external purposes.
Wrapping Up
It’s time to leave the traditional accounts payable methods behind. Put yourself above the competition by learning about the best accounts payable practices and adopting cloud-based platforms to centralize and streamline the workload. Embracing digital transformation with software like Online Check Writer and Quickbooks can help your company achieve a wide range of improvements through time savings, better document management, and communication.
The ultimate goal of your accounts payable filing system is to keep you on top of your debts. Using accounting software reduces the risk of human error and automatically generates accounts payable reports for you. Meaning, your financial records will be accurate and up to date.